Wednesday, June 1, 2011

Housewife Zairulliati Mali, 30, reading guidelines on how to save electricity following the 7.12 per cent hike in power tariffs.

Government departments have been directed to start reducing their energy consumption following the 7.12 per cent hike in power tariffs.

Prime Minister Datuk Seri Najib Razak said this was necessary as there was, currently, too much wastage because of the country's relatively low power rates.

"With the low power rates, there seemed to be a lack of motivation to reduce electricity consumption."

The government announced on Monday that the increase in tariffs would only affect 25 per cent of domestic consumers. Consumers will pay 2.23 sen per kilowatt hour (kWh) more for electricity, or 33.54 sen per kWh starting today.

Energy, Green Technology and Water Minister Datuk Seri Peter Chin Fah Kui had said 4.4 million of the 5.94 million households, which used less than 300kWh, or RM77 a month, would not see an increase in their bills.

Najib said the country's low power rates prevented gas companies like Petronas from investing in the search for new sources of oil and gas.

He said poor returns from the low power tariffs prevented the government from developing alternative energy resources which required high investments.

"That is why we have decided to introduce the feed-in-tariff that will go towards the funding of renewable energy resources. We hope to introduce the feed-in-tariff system sometime in September."

The feed-in-tariff involves the charging of an additional one per cent fee in consumers' electricity bills, to be channelled to the country's renewable energy fund.

In Putrajaya, Deputy Prime Minister Tan Sri Muhyiddin Yassin directed the Domestic Trade, Cooperatives and Consumerism Ministry to closely monitor the prices of goods to ensure they were not increased.

He said action would be taken against traders and businesses who increased their prices.

"There shouldn't be any increase in the prices of consumer goods. It is only a 7.12 per cent increase and only the industrial sector and some businesses will be affected," he said after opening the Diamond Building, the headquarters for the Energy Commission of Malaysia.

Muhyiddin also said the government had done a careful study and considered many factors, including the impact on the people, cost of living and inflation, before deciding on the increase.

On the possibility that Barisan Nasional might lose its popularity, Muhyiddin said the hike was not based on popularity, but on a global phenomenon.

"We can be popular for a while, but how are we to sustain the increasing costs and impact on the nation? We are being a responsible government (by rationalising the subsidies)."